WTI crude oil prices fell by 3.53% to $91.92 per barrel, while RBOB gasoline prices dropped 2.49% to $3.39 per gallon on June 1, 2023. This marks the second consecutive day of declines amid optimism surrounding a potential US-Iran peace deal that could reopen the Strait of Hormuz and lift existing US sanctions on Iranian ports. Iran is expected to respond to a US proposal via Pakistan in the coming days.
The ongoing blockade of the Strait of Hormuz has significantly impacted global oil supply, with Goldman Sachs estimating that 14.5 million barrels per day (bpd) of crude output in the Persian Gulf has been curtailed. Approximately 1.7 million bpd was exported from Iran in March before the blockade, which was initiated on April 13. This disruption could lead to a reduction of nearly 1 billion barrels from global crude stockpiles by June if the conflict continues.
Additionally, OPEC’s April production fell to a 35-year low of 20.55 million bpd, as the organization announces plans to restore output by 188,000 bpd in June. US crude oil inventories also showed a 0.7% increase above the seasonal average as of May 1, despite a slight decline in production to 13.573 million bpd.
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